Banking system needs to factor in the climate risks in order to attain the goal of carbon neutrality by 2070. Discuss (200 Words)
Refer - Financial Express
Enrich the answer from other sources, if the question demands.
IAS Parliament 3 years
KEY POINTS
· Climate change poses a systemic risk to the Indian economy. Estimates of the impact range from 3% of lost GDP per annum to lost economic potential of $35 trillion by 2070, with virtually no sector left untouched.
· Sebi has made a start by making Business Responsibility and Sustainability Reporting mandatory from this year, but, as with everything, enforcement is key.
· While RBI has been increasingly vocal about the climate challenge, it has yet to issue climate-related guidelines on assessing or managing risks. Banks should not be waiting for regulations though.
· Boards that allow their management to ignore the financial risk that climate change poses to their institutions profitability do themselves, and their investors, a disservice.
· As a first step, the Indian banking sector needs to align itself with India’s current goal of #CarbonNeutrality by 2070. That means 2050 or earlier for ‘easier to abate’ sectors such as electricity.
· There is a growing body of knowledge, and Indian banks will do well to partner with international initiatives such as UNEP’s Principles for Responsible Banking, Net Zero Banking Alliance, Task Force on Climate-related Financial Disclosures etc.
Rekha 3 years
Kindly review mam/ sir
IAS Parliament 3 years
Good attempt. Keep Writing.
Rekha 3 years
